Why Uber is wise to destroy itself, before someone else does

In this July 15, 2015 file photo, Uber driver Karim Amrani sits in his car parked near the San Francisco International Airport parking area in San Francisco. Hilton is hailing the ride sharing service Uber to help guests reach its hotels and then explore the city where they are staying, the companies announced Tuesday, Sept. 1, 2015. (AP Photo/Jeff Chiu, File)

In this July 15, 2015 file photo, Uber driver Karim Amrani sits in...

From taxicab unions and package couriers to politicians and regulators, a growing crowd of people would like to destroy Uber.

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“We like to say that we give riders high-fives and give drivers hugs,” Kalanick said. “Taxi drivers have to pay $140 a day to rent a car. For that privilege, they get to be impoverished. Taxi drivers are good people. They are just treated badly.”

So why is Uber trying to put all human drivers — including those who work for taxis and Uber — out of business?

“There is an insane amount of public good” that comes with driverless cars, including better safety, Kalanick said. “As a technology company, am I going to be a part of the future or resist it? We don’t want to be the taxi companies before us.”

On the surface, Kalanick sounds flaky, even hypocritical. But his plan also reflects a business reality that Silicon Valley knows all too well. Technology is evolving so fast that companies must adapt or risk getting disrupted into extinction.

Quaid (Arnold Schwarzenegger) finds himself in a robot driven Johnny-Cab in a scene from the movie "Total Recall."

Quaid (Arnold Schwarzenegger) finds himself in a robot driven...

“The pace of change has accelerated,” said Basheer Janjua, founder and president of the CTO Forum, a group of top technology and business leaders from companies like Apple, Pepisco and Verizon. “There are no longer five-year business plans. Companies have to ask: ‘How do I continue to be relevant? What can disrupt me in the future?’”

What makes Uber’s move into driverless cars so remarkable is Kalanick’s desire to aggressively think ahead. Remember, Uber is still technically a startup, though a well-funded one that’s reportedly worth more than $50 billion on paper. The company hasn’t even gone public yet and is still fighting regulators around the world to expand its one service.

But Uber’s effort to preemptively remake itself is “quite courageous,” said Richard Mahoney, a former chairman and CEO at biotech agriculture giant Monsanto.

“To hit a self-destruct button, nobody does it, especially when you’re at the top,” Mahoney said. “Companies only do it when they are in dire situations.”

Perhaps Mahoney feels some kinship with Uber. For most of its existence, Monsanto was a successful chemicals company, making everything from pesticides to astroturf. But in the early 1980s, Monsanto decided to pursue genetically modified crops using technology from Genentech in South San Francisco.

At the time, investors and employees were not too happy, Mahoney said.

“Wall Street was outraged,” he said. “They called it ‘Mahoney’s Folly.’ We were also taking money away from existing parts of the company and that’s not very popular.”

Which is why Uber is smart to look ahead. The company has no shareholders to please — for now. Uber does not have billions tied up in infrastructure like factories or fiber optic networks. Uber does not yet have rival divisions fighting for resources and attention.

“What I appreciate (about Kalanick) is that he already sees that ‘we will be obsolete soon,’” Janjua said. “He is already creating an alternate business model. That’s admirable.”